Correlation Between VivoPower International and Baron Fintech
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Baron Fintech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VivoPower International and Baron Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VivoPower International PLC and Baron Fintech, you can compare the effects of market volatilities on VivoPower International and Baron Fintech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VivoPower International with a short position of Baron Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Baron Fintech.
Diversification Opportunities for VivoPower International and Baron Fintech
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VivoPower and Baron is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Baron Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fintech and VivoPower International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VivoPower International PLC are associated (or correlated) with Baron Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fintech has no effect on the direction of VivoPower International i.e., VivoPower International and Baron Fintech go up and down completely randomly.
Pair Corralation between VivoPower International and Baron Fintech
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 17.84 times more return on investment than Baron Fintech. However, VivoPower International is 17.84 times more volatile than Baron Fintech. It trades about 0.17 of its potential returns per unit of risk. Baron Fintech is currently generating about 0.42 per unit of risk. If you would invest 82.00 in VivoPower International PLC on September 1, 2024 and sell it today you would earn a total of 36.00 from holding VivoPower International PLC or generate 43.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VivoPower International PLC vs. Baron Fintech
Performance |
| Timeline |
| VivoPower International |
| Baron Fintech |
VivoPower International and Baron Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Baron Fintech
The main advantage of trading using opposite VivoPower International and Baron Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Baron Fintech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baron Fintech will offset losses from the drop in Baron Fintech's long position.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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